Good evening. Some are already calling it a recovery, but if you're out of work in the United Kingdom, you'd be hard pushed to realized that this was actually taking place. Unemployment is up in Britain. The flood of people joining the jobless queue, it is slowing but it is still on the increase. There seems to be no turnaround and certainly new jobs are not being created.

If we look at what happened in the U.K. in the last month, particularly between the last quarter, you will see unemployment in Britain, and remember, this has to be put into the whole concept of where unemployment in this recovery is at the moment.

Unemployment in the U.K., July to September, up 30,000, 2.46 million people now unemployed in Britain. The rate of unemployment more than 7 percent, less than the U.S. 10.2 percent, but of course, more than, say for example, Japan. And I'll give you an overview in just a moment or two on just how it all fits in with the rest of the world.

The worrying part about this sort of jobless numbers is the out of work youth that are unemployed. It is the highest level since 1992. Now this is for the age group 18 to 24. Overall, if you factor in what happened to them, unemployment is now at 7.8 percent. This will be a familiar story to many of you in your individual countries.

The U.K. jobless rate, whether it can stay at that particular area is going to be the key question. We know that unemployment and jobless numbers are a lagging indicator. But remember, unlike, say for example, France or Germany, or even to that extent the United States, the U.K. is not officially out of recession.

The British finance secretary, Alistair Darling, says that he expects the U.K. to be out of recession by the end of the year.

As we've been telling you, young job-seekers in the U.K. are faring worse than they've been at any point in the last 17 years. Fiona Sandford is the director of career services at the London School of Economics, and make sense of these things.

Fiona, you've just heard my summary of the situation, is that fair?

FIONA SANDFORD, DIRECTOR OF CAREER SERVICES, LONDON SCHOOL OF ECONOMICS: It is fair. But I think we are seeing a few green shoots, Richard.

QUEST: Whoa, whoa, whoa, whoa.

(RINGS BELL)

Did you just use the...

SANDFORD: Yes.

QUEST: You just used the "green shoots"?

SANDFORD: Yes, I did. But just tiny, tiny amounts. And certainly in the graduate labor market we are seeing the numbers of jobs for 2010 graduates up more than we'd expected them to be a few months back. So it's not up to anything like pre-crunch levels, but it's better, we think, for the graduates in 2010 than 2009 or 2008.

QUEST: So when we look at the number, 7.8 percent overall, you saw this rise. The rise this time was quite largely predicated on graduate numbers.

SANDFORD: Yes.

QUEST: People who left at the summer and still can't get a job, wasn't it?

SANDFORD: Yes. Yes, it was, indeed. And we are working very hard with the class of 2009 trying to get them into work. And gradually we are.

QUEST: What are you telling them? Because the -- my reading of the situation is the average length of time that graduates can expect to be unemployed is longer now than it has been at any point in recent history.

SANDFORD: Yes, that's probably fair. But what are we telling them? Well, I think there are three things. The first is, don't disengage. Now is not the time to disengage with the labor market. There are jobs out there. It may not be your first choice of job, but a job -- any job, is going to give you client-facing (ph) skills.

QUEST: The British prime minister, Gordon Brown, today in parliament reacted to what these unemployment numbers -- specifically focusing on youth unemployment. We'll talk about that in a second.

(BEGIN VIDEO CLIP)

GORDON BROWN, U.K. PRIME MINISTER: Those young people who are 16 -- 18 to 24 will get help, if they are unemployed, to get back to work. And already 95,000 young people are getting the help that is necessary so that sooner they will have the training and work that is necessary for them to get back to work.

(END VIDEO CLIP)

QUEST: Fiona, do you think that there is anything that government can do in the sense it can stimulate, they can pump -- prime pump -- or pump prime, but ultimately until private sector moves in?

SANDFORD: Yes. Until the private sector moves in, I think there are limited things that government can do. They are already though putting money into helping people like me find internships for new graduates. And I think that's very important.

Postgraduate internships can help enormously. And that they're supporting university career services and various other people to help new graduates, to work with new graduates, offering additional interview coaching skills, help with applications.

QUEST: When you hear the numbers that I'm talking about today, and you hear -- you put it into perspective of the rest of Europe, I realize we're coming off a very low bottom here, but are you more or less optimistic at the moment?

SANDFORD: I'm slightly more optimistic than I was a few months ago. And it's interesting, just before I came out, I was reading some information from my counterparts in the U.S., and they are more pessimistic than we are in the U.K., significantly more pessimistic than we are in the U.K., which is interesting.

QUEST: They also have a 10.2 percent rate of unemployment.

SANDFORD: Exactly.

QUEST: Fiona, please, make me a promise that you'll come back again and talk about these things. We'd love to have you on the program.

SANDFORD: Sure.

QUEST: Yours -- to help us understand what is happening in the world of unemployment, many thanks.

Now I would love to tell you that good times are just around the corner. That doesn't look the way it is at the U.K. at the moment, and that was the sentiment from the governor of the Bank of England who says that Britain's economic recovery remains highly uncertain. Governor Mervyn King says that emerging from recession will take time.

(BEGIN VIDEO CLIP)

MERVYN KING, GOVERNOR, BANK OF ENGLAND: Last November, the full ramifications of the financial crisis were just starting to become clear. The banking system was in near meltdown. Output orders and confidence had fallen off a cliff, to use the phrase that we heard so often from around the world.

We've come a long way since then, helped in part by the extraordinary policy actions that have been implemented. We have, however, only just started along the road to recovery.

(END VIDEO CLIP)

QUEST: Only just started on the road to recovery. It's hardly a ringing endorsement of where economic growth will be going in the near future. And yet upbeat data out of China pushed European stock markets higher on Wednesday. To the numbers on the globe.

(RINGS BELL)

The main indices finished comfortably in the black. Mines and financials led the way forward. Shares in France's biggest retail bank, Credit Agricole, surged 5 percent. It was after the lender made more money than expected.

Stronger metals, well, that was BHP Billiton, Rio Tinto, of course, ArcelorMittal, that will be the one that you'll want to look over there.

If we need to factor in what is happening in markets open and doing business, we are just two hours away from Wall Street's close.

(RINGS BELL)

And this is how the market -- up 30-odd points. At one point -- I wasn't looking too closely, but forgive me if I'm wrong, I think we went over 10,300 today, we're now just up a 0.25 percentage point.

The news headlines now and Max Foster. It has been a busy day, Max, for you and me. What have you got for us?

MAX FOSTER, CNN INTERNATIONAL ANCHOR: Yes, absolutely. Here's a look at some of the stories making the headlines, Richard.

On the eleventh hour of the eleventh day of the eleventh month of 1918, an armistice was signed, ending World War I. In France, Angela Merkel became the first German chancellor to take part in Armistice memorials in Paris. In the U.S. it's called Veterans Day, President Barack Obama placed a wreath at the Tomb of the Unknowns at Arlington National Cemetery.

Germany is in shock and mourning after the suicide of star athlete goalkeeper Robert Enke was killed when he threw himself in front of a train near his home Hanover on Tuesday. He left behind a suicide note. His wife says Enke had been suffering from depression. Analysts say Enke had a good chance of being chosen for the German national team and competing in next year's World Cup tournament.

A German man has been sentenced to life in prison for the murder of a pregnant Egyptian woman in Dresden. The man, identified only as Russian- born Alex W., stabbed and killed Marwa el-Sherbini during a defamation hearing in July. He also attacked her husband, who survived. The court said the defendant -- el-Sherbini, said -- had called her a "terrorist," was motivated by a hatred of foreigners.

Brazil's lights came back on this morning, but last night was very dark. A power outage affected up to 16 million Brazilians, all of neighboring Paraguay was blacked out for 30 minutes. Officials say the outage was caused by downed transmission lines leading from a major hydroelectric dam to the rest of Brazil.

I'll have more on all of those stories at "WORLD ONE" a bit later. Plus, imagine going to the aquarium for a leisurely look, only to see one shark bite another shark, pretty horrifying on its own, but imagine if out of the womb pops some baby sharks. That's just what happened in New Zealand. And, Richard, we're going to have all the details for you 8:30 p.m. London time. It's our producers' favorite story.

QUEST: Hang on, this sounds...

FOSTER: It is extraordinary, I have to say.

QUEST: I've never thought of you as a midwife, Max, but midwifery and Max all go together. We will discuss -- (INAUDIBLE) things -- China and the U.S. dollar deep in the doldrums. Tim Geithner says it's important to prop it up. We'll be talking it through in just a moment. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: If you're betting on China's recovery, the odds just got slightly better. New numbers show the pace of the global slump is easing off in what is the modern workshop of the world. Exports fell 13.8 percent year-on-year. And that's the smallest decline this year.

Industrial production jumped an impressive 16 percent too in October, compared to the same month last year. Chinese consumers were ready, retail sales grew 16 percent, meaning China is on course for growth of 8 percent. Those heavyweight numbers delivered a stinging blow to the U.S. dollar, which promptly fell to a 15-month low against a basket of currencies on Wednesday.

The dollar is already 16 percent down year-on-year. There is January, look what happened, we're not there, and now -- I mean, it has been pretty much solidly all the way from this point, right the way down to where we are at the moment.

The dollar's fall caused the U.S. treasury secretary to step in. Tim Geithner says he believes deeply that it's very important to maintain a strong dollar. That change in tone and language caused a slight blip in the right direction from its session lows.

Niall Ferguson, professor of history at Harvard University, joins me now live from Boston. Good evening to you, Niall. Many thanks for joining us.

QUEST: So the U.S. treasury secretary now believes deeply in a very strong dollar.

FERGUSON: Well, that has to be a signal to sell the dollar some more, because the more the policy-makers use the phrase "strong dollar," the more you know that tacit policy in Washington is for the dollar to go down. It's a tremendous source of stimulus from the point of view of anybody looking to export from the United States.

And remember, a very large proportion of S&P 500 companies make their money outside the United States. So this seems to me to be a classic case of, you know, believe the opposite of what they say.

QUEST: Except, of course, when you factor in the China play into all of this. And you look at the linkage -- the accepted linkage between the Chinese renminbi or yuan, whichever which, and the U.S. dollar. And the refusal of the Chinese to allow the appreciation thereof.

FERGUSON: Well, as you know, Richard, in my book "The Ascent of Money," I coined the word "Chimerica" to describe this strange fusion of China plus America. And we're entering a kind of phase which I would characterize as the death throes of "Chimerica."

It's really perfectly reasonable for the dollar to weaken given that the U.S. current account deficit is once again on the rise. But for the Chinese currency to weaken with it is completely economically nonsensical. The Chinese peg their currency to the dollar. They intervene in currency markets to stop their own currency appreciating to keep their exports going.

But it really is very hard to justify when you're running a trade surplus, as China still does, and when you're the fastest-growing economy in the world, this is just juicy an already pretty highly-juiced economy.

QUEST: The problem with it, and I take your point on board, is that there is no -- you know, you can only jaw-jaw the Chinese to allow the peg or the link to break. But they seem singularly unwilling to do so to damage their own export potential.

FERGUSON: Why would they do it? I mean, what is in it for them? Right now they've got a magic formula, massive state investment in infrastructure, rapid growth of the Chinese consumer's retail spending, plus a devaluation that makes their exports super-competitive in world markets.

I mean, I characterize it as the "10-10" combination. The Chinese get 10 percent growth, and the U.S. gets 10 percent unemployment. But why would they change that? It's working for them just perfectly.

QUEST: Niall, let's talk, if we may briefly, this weekend had the G- 20 up in Scotland, which was bitter and cold, and that was the G-20, not the weather that was at St. Andrews. The transaction tax came and went as fast as the Scottish mists. And still they're talking about the possibility of some sort of framework for coordinated or consultation on exit strategies.

Can you give credence to their ability to do this?

FERGUSON: Not really. I think these G-20 meetings are becoming more and more of a charade, less and less of value emerges as far as fundamental change in international financial regulation is concerned.

And that's where exit strategies -- it's absolutely comical to be talking about those when it's very clear that the Fed sees the need to keep interest rates at historic lows for the foreseeable future. The only people who need an exit strategy right now are the Chinese, because theirs is one of the few economies in the world that one could actually say is overheating.

QUEST: Niall, many thanks, indeed. Please do come back again, we always love to have you on the program. Thank you very much. Niall Ferguson joining me from Boston.

When we come back in a moment, passengers are up in arms, airlines don't want it. We'll bring you the latest fallout on a new tax on tickets, and also why tourism is perhaps the stepchild's son of industry.

(COMMERCIAL BREAK)

QUEST: Welcome back. Global tourism ministers are railing against British airline passenger tax, it's calling it unfair and counterproductive. According to the Times Online, it could slap another $91 on the price of an economy ticket. It all comes at a time when tourist is very much on the agenda, especially at World Travelmart (sic), which is taking place in London at the moment.

WTM, the second-largest of the travel events of the year. If you look at the latest numbers from the UNWTO, the World Tourism Organization, this is what they say: "Visitor arrivals overall down 5 percent in 2009." In doing this, they're predicting a modest recovery, but you have to remember that 5 percent is not evenly spread.

So some major tourism markets will be very badly affected, and others where there may be more growth, for example, in Asia, will be more resilient. Even so a 5 percent decline in an industry that has traditionally continued to grow is serious stuff.

One of the reasons is perhaps the airline tax. Now the WTO is calling -- joining in the criticism on this. It is called the APD, the passenger duty tax. Its target, different passengers on different flights, the U.K. has one, various other countries have it and got rid of it. The airlines simply say, it's too much and it is killing an industry that is already in its -- well, I wouldn't say death throes, but already in serious injury.

One of the big issues at the WTO is the green future, industry needs to adapt, industry needs to support, we go on holiday for our leisure, but we have to remember planet Earth. There are many issues that we need to talk about when it comes to the tourism industry. Taleb Rifai is the general secretary of the WTO, and he joins me now.

QUEST: So a very heavy agenda. I need to know from you how seriously the tourism industry is at the moment?

RIFAI: Very serious. Very serious. It followed, of course, the seriousness of the whole economic performance. And it's bouncing back in a modest way, the same way the economy is. But the more serious part of the industry is it's a lack of recognition. It's the fact that people take it for granted and that when other sectors of the economy start to ache, everybody shouts.

QUEST: But is that because when we talk about cars and "Cash for Clunkers," we can see a car factory.

RIFAI: Correct.

QUEST: You can see a steel mill. But you can see a hotel and you can see an airline. So why is it difficult to see?

RIFAI: People are seeing fragments of the industry, they don't see it in its totality. And they don't realize how interconnected it is. These industries also made up of small- and medium-sized operators and such. And their voices are usually traditionally not as powerful and not as strong and not as very vocally heard as the others.

QUEST: OK. So you're saying that the tentacles of the industry go far and deep. But hang on a second, most countries have tourism boards, most countries have tourism ministers, most countries spend a great deal of money on tourism.

RIFAI: That is correct. That is correct. Yet very little public attention and very little direction support is given from governments to the tourism industry. It is one of those industries that -- whose growth and development has by far exceeded the recognition of it.

QUEST: We know that -- I mean, I've heard a number that says up to 10 percent of the world is involved, employment in some shape or form. Do you accept that number?

RIFAI: Well, we estimate about 220 million, 230 million people directly and indirectly working in tourism. You know, the very important fact here, Richard, is that people don't recognize how fast this industry grows. And it -- we didn't come to grip with it.

In 1950, it is believed that the majority of the world population -- the absolute majority of the world population never traveled more than 100 kilometers from the place where they were born. Today you have almost 1 billion people crossing international borders every year.

QUEST: So how -- we're coming to the end, but you've been -- not you personally, but your organization has been banging on about this, along with all of the other organizations, what more can you do? Because let's just take APD for a moment, passenger duty.

That is going up in some countries. It has been abandoned in other countries. But governments seem to be immune from the idea of not doing it.

RIFAI: They are very immune. The U.K. government in this particular case fails to recognize that this is not a tax for the environment, it's a tax on developers (ph).

QUEST: But what can you do?

RIFAI: We can keep -- we can keep talking about it. We can keep soliciting help. And we need to tell -- to talk to the -- at the highest level of political decision-making process. And that's exactly what we are doing in our approach and in our format that we have now developed in the UNWTO.

QUEST: You'll come back and talk more about this?

RIFAI: We would -- certainly do. Thank you, Richard.

QUEST: Thank you very much.

RIFAI: Thank you very much.

QUEST: Now -- now this year's World Travel Market, as we've mentioned, is happening in London. There is plenty to be talking about. And one of the exhibitors is Etihad Airways. Airlines, especially six "freedom airlines," that's those that funnel into hubs and funnel out again, amongst in the Gulf, whether it's Etihad, Emirates, Qatar, have been some of the most successful in recent years.

I caught up with the chief exec, James Hogan, while I was in Abu Dhabi. It was important to know, was Etihad seeing any sign of recovery within their business?

(BEGIN VIDEOTAPE)

JAMES HOGAN, CEO, ETIHAD AIRWAYS: Because we're taking additional aircraft, we're still achieving the economies of scale in crew productivity, in crew utilization. But overall, you know, we're running a pretty tight business. One challenge, yield.

QUEST: Yield, it all comes back to yield, how much basically you're going to get somebody who will pay for one of these expensive seats, because yield at the back is nowhere near as significant as the yield up here.

HOGAN: Well, all customers are important to me. And what we're seeing with our product, with our network, with our reputation, you know, we're seeing good seat factors. So what is important for me is all cabins. It's elasticity, how we continue to push, but also it's a value in brand, service, connectivity, a number of factors that build that yield scenario.

QUEST: Let's talk about the pilots at the front. Three, four years ago, the talk was all of pilot shortages. In those days it made sense to have an academy from cadet to captain. Now there is a glut at some levels of pilot. You could go out, James, with your checkbook and buy the pilots you need.

HOGAN: And, Richard, you have been around a long time, five years ago it was the opposite, it's a cyclical business. And we have good times and we have bad times. You know, we're creating an airline that's going to be one of the major airlines of the world. And when we peak, approximately 150 aircraft down in 2017, that's very important that we have that training environment to develop our own pilots for the future.

And we have decided to invest in the development of our people. Our pilots are based here, we're working it within their program. So it gives us the efficiencies that we need to develop our pilots moving forward, put them through the training programs effectively.

But more importantly, to meet our standards.

QUEST: Top airlines maintain similar standards when it comes to pilots at the front. So why did you want to spend this large amount of money having your own facility?

HOGAN: As a CEO of a carrier, my number one priority is safety. And having that surety that my part of management team and meeting the best standards is fundamental. And that's the investment is there.

(END VIDEOTAPE)

QUEST: Talking to me not only about the state of Etihad, but also their pilot training (INAUDIBLE). And of course, we'll be talking about later in this program.

The radical changes, which could mean banks never again are too big to fail. We'll be live to Wall Street to find out how lawmakers think they can do that in just a moment.

Well, up 20 -- ooh, dear. Sorry, the bell was not as -- anyway, the market is up 27 points, 10,274. It's a quarter of a percentage point. That's pretty much not the best of the session, we're off slightly on that.

Susan Lisovicz is in New York, at the New York Stock Exchange, joins me now. And, Susan, major changes have been discussed concerning financial oversight. Some would say locking the stable door after the horse halfway 'round the track. But I'm wondering what's wrong with the proposals that have been put forward.

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Well, I think, Richard, first of all, you know, it's going to be a Herculean effort to come to agreement between the White House and Congress on what to do about this United States financial system, which clearly needs a lot of retooling. I guess what you're referring to is the Senate proposal to overhaul the financial system, which is quite dramatic. In essence, it would create three new agencies. It would have a super regulator and I guess the other end of that, the super regulator would really diminish greatly the Federal Reserve's powers. For instance, it would curb the Fed's ability to offer emergency loans to individual companies, as well as bank supervision and consumer protection powers. So that's not something that the Fed would like. And maybe that's why "The New York Times" has a front page story today about how the people like Ben Bernanke are learning to become more adroit at politics, as well.

One of the other things that it would do is create a -- an agency for financial stability to address the notion of too big too fail. Let's hear two -- let's hear what the chairman of the Senate Banking Committee, Chris Dodd, has to say about that.

(BEGIN VIDEO CLIP)

SEN. CHRIS DODD (D), CONNECTICUT: We will end, for all time, I hope, too big to fail. Those words should only be used again in historical context. We cannot allow the collapse of a few firms to threaten the entire economy of our own nation and others around the globe, for that matter.

(END VIDEO CLIP)

LISOVICZ: So basically, Richard, that agency for financial stability would have a board with people like the Treasury secretary and the Federal Reserve chairman and other regulators on it to oversee the risky practices that brought the financial system here and, perhaps, around the world, to its knees.

And just quickly, a third agency would oversee consumer oriented products like mortgages and credit cards. So it's really huge. It's more than 1,100 pages and they're just talking about it now. Debate is a ways off yet -- Richard.

QUEST: Susan Lisovicz in New York.

I -- I -- we -- next time, you and I, Susan, we'll talk on the (INAUDIBLE). You know the old line, too big to fail means simply too big.

LISOVICZ: Exactly.

QUEST: All right, Susan, we'll talk about that in the future.

Two Bear Stearns executives have been acquitted of wrongdoing by a jury in New York. They have been the only two individuals facing criminal charges that relate to the collapse of the former Wall Street company.

Maggie Lake joins us now from New York -- Maggie, now, this is interesting. If, for no other reason (INAUDIBLE), but also the speed with which this case came and went and it all seemed to sort of -- well, you tell me.

MAGGIE LAKE, CNN CORRESPONDENT: Yes, Richard it is -- it -- I feel like we were just running the video of these two fellows, you know, having their first day in court. And you know how legal cases are, they drag on forever.

Not this one. And that gives you an indication of just what the jury felt about the government's case. A lot of the jurors -- and it was a jury trial, which had a lot of people worried, because, remember, everyone is so angry about what happened. And maybe the government was banking on that.

But these jurors weren't -- weren't accepting that as the only thing to go on. And a lot of them coming out and speaking today, saying that, basically, the government put on a weak case. One of the women said that - - the jury forewoman, as a matter of fact, speaking about the deliberations said that everything contradicted the e-mails, which were the bulk of the evidence that they put forward, went both ways -- they say one thing one time, another thing another time and the government just didn't give us enough to go on.

Another one coming out and saying, you know, really echoing that -- we just weren't 100 percent convinced; as the witnesses began to testify, I had my doubts; the defense team just tore apart the government witnesses, who, although -- you know, addressed some issues, basically said I have no idea what was going in -- on in their minds.

In fact, Richard, this is the thing that I -- I couldn't believe in -- in a Bloomberg article, talking about the jurors. One of them actually said: "Gee, when I was listening to the government, these guys were working 24-7 try to rescue their funds. I really felt like they were trying their best and I would put my money with them."

So, I mean, not exactly a ringing endorsement when you've got the jurors saying they're going to hand over money to these hedge fund guys. So they are clean and free. The government clearly didn't put the best foot forward here.

QUEST: Because, you know, that's the point, isn't it, Maggie?

It really is -- it becomes not a question of what and who and how they did and whether anybody did anything wrong. It becomes a question of whether the government was incompetent in the prosecution of this case; and, if that is the case, what it means for any further trials, for example, allegedly, in the (INAUDIBLE) insider trading case.

LAKE: That's right, because we've got a lot going on. Of course, the defense lawyers would say it does matter, it wasn't just the government messing up, there was no case to begin with, that there was no criminal intent.

But you do have to take a look at the whether this is going to have repercussions for a lot of these other cases. I talked to a legal expert who said their main problem here was the government relying so much on the e-mails. Although they can be important in core cases, they're a new tool, an advance for prosecution. The case can't rest just on that. You need to have corroborating witnesses to say I was there, we planned this, to show what was going on. Otherwise, as those jurors said, you can interpret e- mails all sorts of different ways, or parts of them can be taken out of context and mean something else.

So that's what they think the real problem was here -- there just wasn't enough other evidence. And in the Galleon (ph) case you mentioned, although, of course, they're not connected, they have wiretaps. They have cooperating witnesses, as well as e-mails. So that would indicate that maybe this is going to play out a little differently. Whether they win or not, completely up in the air. These defense lawyers are going to -- are going to do their best, but it seems that they have gotten more evidence to rest on.

In this case, it was all about their e-mails. And, you know, the jurors said, listen, they want to try to make these guys the scapegoats of a financial crisis. All these other analysts got it wrong, so they did they.

QUEST: All right, Maggie.

Just in case you didn't say it often enough, I'll throw a couple more in -- a more allegeds, allegeds, allegeds in relation to...

LAKE: Yes.

QUEST: ...in relation to any other litigation that might be pending.

Maggie Lake, who's in New York.

Now, the ax -- or perhaps we should say the hammer -- will fall on another Wall Street scandal. It will happen this weekend when the lavish lifestyles of one of the world's most famous fraudsters goes up for auction in New York.

Bernard Madoff is, of course, the man concerned. He is serving 150 years in prison. But these are just some of the little.

If you find you're doing a bit of Christmas shopping, holiday shopping early, how about one of his -- one of his watches?

It's a Rolex. It's worth $87,000. Ironically, it is known as the prisoners watch. This telescope is wroth $160. It is thought that Bernie Madoff used it for star gazing and -- I mean, you know, what can one say, he's now looking out of a prison cell somewhere in the U.S.

His college ring, worth up to $360, from Hofstra College in New York, which Madoff attended. It's engraved with his initials and his degree. And bear in mind, if you do feel like bidding, whatever you may bid, the money will all go to help pay some of the victims in their -- of his fraud.

When we come back in just a moment, the executives of Bear Stearns are out of their hot water. One person still believes markets should not take the rap. It is the former Spanish prime minister. We'll hear from him, in just a moment.

(COMMERCIAL BREAK)

QUEST: Get your books in order -- that's the latest warning from the European Union to 13 member countries. Spain woof several given until 2013 to bring public debt back under tight control. The problem for all the countries at the moment, it's the balancing act between continuing their fiscal stimulus packages or starting to cut back on the vast federal, huge deficits that are being created by governments.

At what point should they start cutting spending?

The former Spanish prime minister, Jose Maria Aznar, believes that now it is time to cut the deficit, not continue stimulus spending.

(BEGIN VIDEOTAPE)

JOSE MARIA AZNAR, FORMER SPANISH PRIME MINISTER: If you analyze the origin of the current crisis, you know, the current crisis in the financial system. The financial system is a system under more controls in all the economies in the world, in any country in the world.

There is regulatory responsibility, supervisory responsibilities that have -- have fell, but not in the -- the market. It is the grand decisions of some managers, electors and -- and chiefs of the companies, but not the markets.

The markets are efficient -- not perfect, but efficient.

QUEST: And I would just, perhaps, with respect, suggest, that the market allowed this to take place. The market played a role in that it allowed excess risk to -- even Alan Greenspan believes -- now says that the unfettered view of the market was a mistake.

AZNAR: Yes, he has -- I believe that the mistake was taken specifically from Greenspan, not from the markets, because to establish very minimal rates of interest or negative rates of interest during a lot of time -- period of time, was a mistake. And the flow of the money to all the markets in the world was a mistake.

But this is not -- it is not the fault of the market. It is a consequence of the system of the central -- of the central bank to put cheap money and cheap money in -- in all the countries is the better manner to -- to -- to -- to provoke a crisis.

QUEST: You -- you're talking to a -- you talked in a speech about the unsustainable deficits. Now, clearly, they are unsustainable, but they are also necessary at this point in the recovery process.

Would you accept that?

AZNAR: I don't. No, I don't think that this is necessary to -- to fall in huge deficits to recover the economies.

QUEST: So you would already be pulling back on stimulus spending?

AZNAR: And I think this is necessary, stimulus spending, in some parts of the economy, but not making for all the economies in the future deficit and more indebtedness. But this is impossible. If you're trying to combat and fighting a crisis base in debt -- in private indebtedness with more indebtedness and with more deficits, you will create the conditions for the next -- for -- for the next crisis.

QUEST: So you don't agree with the G20, which says that continued stimulus is necessary?

AZNAR: I do not necessary that this continues stimulus to recover the economies, to be more disciplined, to -- to -- to cut budgets, to control deficits, to -- to -- to maintain the -- to -- to -- to gain a competitiveness in -- in -- in reforms and more flexibility, for me, is basic.

QUEST: But to those who say now is not the time to cut the budget deficit, now is not the time to take off -- put off...

AZNAR: Now exactly is the time to cut budget deficits, for to finance these deficits in the future will be impossible. And the -- and the amount of money that will be necessary to finance it -- these deficits, will be impossible to finance new investment in new companies, new -- new jobs for the people.

QUEST: If you were to cut budget deficits now by cutting spending or raising taxes or -- there's only one of the two you can do -- would you not be guaranteeing a double dip recession?

AZNAR: No. I don't (INAUDIBLE) -- it's very clear if you establish some policies based, you know, on less taxes and more free trade and you control the public deficit, you can recover just in the economy.

(END VIDEO TAPE)

QUEST: The former Spanish prime minister joining me and talking to earlier in the week.

Now, a cyclone made landfall near Mumbai and one needs to know -- of course, we need to know how bad it's been.

Guillermo is at the CNN World Weather Center.

GUILLERMO ARDUINO, CNN METEOROLOGIST: We're very lucky again, Richard, because it was a very short-lived issue for Mumbai. Of course, we got rain. Of course, we got the winds. But as you see, it's moving rapidly to the northeast there and in 48 hours, it will be going away. But especially muddy on the Maharashtra, near Nashik, is where the problems were.

And, of course, we got rain in Mumbai. But now things are getting much better. We may see some winds into Gujarat, Madhya Pradesh, Maratawada (ph) and in Konkan. But that's about it. So it's -- also, we got rain where we needed the rain, because this here -- this area has been deficient in terms of the monsoonal flow.

Well, let's see. We may see tomorrow morning still some clouds here in Mumbai. So we may see delays at the airports. Elsewhere, things are good.

The heat in Australia -- well, in the Southern Hemisphere, that's what we have. Adelaide may see 39. Take that into account if you are going there.

While in Europe, in Poland, especially, in Maloposki, in Slaski is where we have the storms and advisories here in this area. This came, actually, from Italy and actually raised toward the north here, bringing the severe storms and the chance of snow storms into the Czech Republic and the northern parts of Austria.

But in general, we're not dealing with terrible weather. Italy may see some, to the south, some severe storms in Calabria, Basilicata, Puglia, Abruzzo getting better.

But look at London. London appears to be fine. On Friday, we may see some rain showers. Temperatures are not dramatically low, not even in the morning or in the evening. But look at this, at the end of the 48 hour term, we may see the storms heading our way.

Stay with CNN.

QUEST MEANS BUSINESS continues after the break.

(COMMERCIAL BREAK)

QUEST: Welcome back.

As a connoisseur of airline travel, I've always wondered if I could make it as an airline pilot. Get to the front of the plane, all of that. So I decided to put my skills along to a test.

The question is, if you had a choice, who would you right here fly your plane?

Would you rather me or would you rather have Isha?

Well, we both decided to try and find out at the Etihad Flight Training Academy in Abu Dhabi.

(BEGIN VIDEOTAPE)

QUEST: Etihad -- who's got what it takes?

Are you prepared to meet your match?

ISHA SESAY, CNN INTERNATIONAL CORRESPONDENT: You are going down.

MATTHEW DOWELL, HEAD, ETIHAD FLIGHT TRAINING PROGRAM: The test is going to take about 45 minutes. It's a series of tests -- six tests in total. And this is going to show us how good a pilot you are. It judges everything from hand-eye coordination skills to your ability to do complex multiple tasks. I wish you the very best of luck.

QUEST: Are you ready?

Three, two, one.

(voice-over): With seconds to make choices, it's harder than it looks.

WOJCIULEWITSCH: A fairly close run. Very nice. Different qualities. Different gradings on the different subjects. Fairly nice. Yes. It was one point, so very close.

QUEST: One point. One point. One point. One point.

SESAY: Congratulations (INAUDIBLE).

QUEST: Congratulations.

(END VIDEO TAPE)

One point, one point, one...

You -- you -- you -- you cheated.

SESAY: One point?

I thought I won by a mile.

QUEST: Come on. My landing was quite OK.

SESAY: Your landing -- well, you veered off to the right. If you had a look at mine, I landed dead on the center, dead on the center line.

QUEST: What did you learn from the whole experience, because I found it extremely difficult?

I found it not only difficult just the controlling of the plane with the air (INAUDIBLE) stick, but those tests -- those psychomotor tests were -- which I've -- I've always known I'm appalling at.

SESAY: I've never felt so inadequate before. We had -- I had three out of 10, you had four out of 10 and the cadets who we met, they -- they're like 20, 21 years old and they -- they scored eight, nine, 10 out of 10.

So at least we know that the people who are flying the plane have incredible minds.

QUEST: I mean, that's the point. The -- the number of -- despite the growth in airlines, I -- I -- they were telling me something like 8,000 applicants for how many posts?

SESAY: Eight thousand applicants, then they get that -- the psychomotor test that we did, they whittled that down and only 140 actually made it into the academy. So we wouldn't have got anywhere near the simulators.

QUEST: What did you think was more difficult, because people always ask me whenever I do a simulator, takeoff or landing?

SESAY: Takeoff was easy.

QUEST: Oh, ho. Ho, ho, ho, ho.

SESAY: That's funny. And landing, I thought that was going to be the hardest one. But -- but the landing that you saw, it was pretty easy for me.

QUEST: The passengers in first class lost their drinks when you...

SESAY: When you and I were there.

(CROSSTALK)

QUEST: Isha, many thanks, indeed.

Right.

When we come back -- and don't forget, of course, you can see more on what we did in the plane as we learned how to fly a plane, Business Traveler, which, of course, you can see it Saturday at 6:00, 18:00.

When we come back in just a moment, Profitable Moment and some serious thoughts on the question of the youth and jobs.

(COMMERCIAL BREAK)

QUEST: Finally tonight's Profitable Moment.

Economists won't be surprised by the continuing rise in unemployment, as we saw in the numbers in the U.K. Despite the fact recovery is on the way. It's entirely normal as a lagging indicator that the jobless numbers will rise for some time to come.

Britain, with 7.8 percent, is less than others, like, for example, the U.S. at 10 percent and Spain, a rate of nearly 20 percent.

It's all bad enough and the worry is, of course, whether any new jobs will be created when the recovery becomes sustained. In the past, it's been the case. But in this recession, nothing has been as before. The length, the depth, the range from peak to trough and the extraordinary measures. It all means new jobs will be created at a much lower rate, which is very grim news for those young graduates leaving university -- high student debts and little chance of paying it back with fresh minted jobs in the future.

Sorry to leave you on a depressing note, but that is QUEST MEANS BUSINESS.